Let me introduce you to my friend, Cherie Lowe–aka the Queen of Free. Cherie and her royal family blog at the Queen of Free, where she wears a plastic tiara and plans on never growing out of playing make believe. Through her blog and various speaking engagements, she has shared her story of becoming debt free with thousands of people across the country–even on the Dave Ramsey Show. (The photo is of Cherie and Cherie’s husband, Brian, the King of Free).
Throughout this year, I want to introduce you to some of my friends. People whose voices I know, respect, and appreciate. Their words often challenge me in my thinking and faith. I hope they’ll challenge you, too:
$127,482.30…the number itself stills astounds me. When my husband, who I affectionately refer to as the King of Free in the blogosphere, calculated how long it would take us to pay it off in 2008, the optimistic guess was 7.5 years. The not-so-optimistic guess was 15 years. And yet, just a few short weeks ago, we made our final Sallie Mae Payment YouTube style and then declared we were debt free on The Dave Ramsey Show.
I know what you’re thinking. How in the world did you accrue $127,000+ in debt?! Are you complete idiots? And while the answer might be yes, do know that we never lived a flamboyant lifestyle that would land us in the company of Robin Leech. Our debt came from miscellaneous sources: over $80K was in student loans (hello, graduate school), $16,500 was in credit card debt, $12,000 of car debt, a $7,000 gap loan when we were both unemployed, $1,600 for furniture, plenty of medical bills from delivering a baby via C-section, a root canal for me and a few minor miscellaneous debts here and there.
And here’s the thing, even if you think we’re complete idiots for taking on that much debt, I know we’re not alone. I have received way too many e-mails from others saying, “I thought we were the only ones.” We weren’t alone and neither are you. So if you’re wondering how you can begin to dig your way out of debt, here are three quick tips for beginning your own debt-slaying journey:
- Get a Handle on What You Make and What You Spend. Believe it or not, most people don’t know how much they make or spend. And if you want to get out of debt, you need to spend less than you make (like way less). If it sounds overly simple, it is. To monitor your spending, spend naturally for 30 days, collecting your receipts in an envelope.
- Read Good Books and Talk to Money Smart People. I hate to be rude, but there are a whole lot of people out there who are much, much, much smarter than you. I cannot overstate the influence The Total Money Makeover by Dave Ramsey had on the quality and direction of our lives. Or find someone who doesn’t have heaps of debt and manages their money well and ask them what they did.
- Make Gradual Changes to Scale Back Your Lifestyle. If you go whole hog for anything in this life, you’re going to fall off the wagon and F-A-I-L. It all begins with one small change made for at least 30 days and then another small change added to it after that (rinse, repeat for 46 more months for us at least). One of the first that we made was to look at our withholdings and see if we could adjust them to get more expendable income on a monthly basis. Another change was setting and sticking to a grocery budget. It saved us hundreds in the long run. Eventually we made big changes in year four like making our own laundry detergent, dropping all TV and opting for Netflix only, and even became weekday vegetarians. The funny thing is, the more success you have, the more sacrifices you’ll be willing to make.